news and analysis mn “candidate journalist” and “better ... · 9/2/2016 · news and...
TRANSCRIPT
9/2/16 page 1 of 13
By Jerry Von Amerongen, used with permission.
NEWS AND ANALYSIS – MN “Candidate-Journalist” and
“better transit” lobbyist reports on and analyzes finances,
current and possible political/legal challenges, and known
risks-uncertainties-cost overruns for the SWLRT plan
Note: An attached .pdf News Release
version includes graphics.
Disclosure: “Candidate-Journalist” Bob
“Again” Carney Jr., (“bobagain”,) a
registered Lobbyist for “We the People”,
an informal association, is the only Republican
candidate to file for the Minnesota State Senate in SD
61; has announced a campaign to win a Pulitzer Prize
for investigative reporting on “the unfolding and
unraveling SWLRT disaster”; has launched a Crowd Funded video series; is
launching a for-profit business for better transit
solutions.
Contact: Bob “Again” Carney Jr (bobagain):
[email protected]; cell phone: (612) 812-4867
Visit: www.bobagain.com
Minneapolis 9/2/16 – “Better Transit” advocate, registered
Lobbyist for “We the People” (an informal association) and
“Candidate-Journalist” Bob “Again” Carney Jr., (“bobagain”)
is offering up the following NEWS AND ANALYSIS on the
current status of the proposed Southwest LRT project – hey…
still no Full Funding Agreement! – with an emphasis on risks,
uncertainty, and political aspects. The presentation is organized
into three stand-alone headers – each is numbered – additional
follow up detail will be provided in a further NEWS AND
ANALYSIS in a week. The three main categories are:
FINANCIAL ANALYSIS; LEGAL/POLITICAL CHALLENGES TO THE CURRENT FINANCE PLAN;
KNOWN RISKS, UNCERTAINTIES AND POSSIBLE COST OVERRUNS.
9/2/16 page 2 of 13
Total contributed from each source, counting in-kind land as HCRRA contribution
$254.8 HCRRA Includes FMV of in-kind land
$528.2 CTIB Includes $11.8 M CTIB portion of COP
$30.3 State
$91.8 Metro Council
$0.0 Hennepin County Excludes FMV of in-kind land
$18.0 Other, as of 7/1/15 Met Council COTW meeting
$5.5 Other/unidentified
$928.5 Total contributed
$0.0 Variance, total contributed less Federal contribution of $928.5
20.0% HCRRA Excludes FMV of in-kind land
56.9% CTIB Includes CTIB portion of COP
3.3% State
9.9% Metro Council
7.4% Hennepin County Includes FMV of in-kind land
1.9% Other, as of 7/1/15 Met Council COTW meeting
0.6% Other/unidentified "Plug" -- added to set variance at zero
100.0% Total contributed
19.8%
Adjusted percentages based on Federal match of $928.5 million, then increased
by 100% to show as percent of total state and local only, but treating in-kind land
as from Hennepin County, and not from HCRRA
Contributions from all but CTIB, State and HCRRR, this is very close to the original
target of 20% from the State -- the argument is then that CTIB money is not
"supplanting" state money.
Assumes state contribution is $30.3 million, that's
arguably about $16 million too high
"Plug" = Gap #3, sets variance at zero. Note, the
CMC 7/16 meeting shows "Henn. Co and Cities at
$23.5 M, this matches with the $18 + $5.5 = $23.5 M
for this and the previous line items
Per 8/25/16 meeting benefit of doubt, more likely
$16 million
[1] FINANCIAL ANALYSIS
Note: while I think it’s important to “show
your work” – most readers probably won’t
benefit from this section, you might want to
skip ahead to [2] LEGAL/POLITICAL
CHALLENGES TO THE CURRENT
FINANCE PLAN on the next page.
At the right is a section of a spreadsheet
analysis of SWLRT finances, which has been
carried forward from a spreadsheet sent out
with my 7/8/15 analysis of the project’s
finances, that spreadsheet was passed out at a
July 2015 Metro Council Committee of the
Whole meeting. At the top, I show the
Hennepin County Railroad Authority
(“HCRRA”) contribution as including $69.0 million for the value of in-kind land contributions, on the theory
that the land is, or was, owned by HCRRA. However, when calculating the percentages, I back out this $69.0
million and show it as contributed by Hennepin County, as distinguished from the HCRRA.
Part of my reason for preparing the spreadsheet in this way is to make it easier to see the continuity of the
financial plan from July of 2015 to the present, and where specific changes and adjustments have occurred. The
dollar amounts trace forward from 2015. As of July of 2015, I found $8 million in “pass the hat” contributions
from cities, and an apparent $10 million adjustment in one of the Met Council slides. To get to the current state
and local share of $928.5 million, I added in a $5.5 million “plug” – this reduced the variance to $0. As of the
July 2016 Corridor Management Committee (“CMC”) meeting, “Hennepin Co. and Cities” are shown as
contributing $23.5 million in “pass the hat” contributions to the project – this total exactly matches the $8
million “pass the hat” and $10 million apparent adjustment amounts from my July 2015 spreadsheet, plus the
$5.5 million “plug”.
I show the CTIB amount as $528.2 million, which includes the $495.5 million that had been approved
before the most recent additional amounts provided, together with the $20.5 million approved at the CTIB
8/31/16 meeting, and $11.8 million of the Met Council’s proposed Certificates of Participation (“CIP”) which
the CTIB has agreed to finance.
9/2/16 page 3 of 13
When we add to the earlier approved amount of $165.3 million the $20.5 million increase that the HCRRA
authority agreed to at their 8/30/16 meeting, but exclude the value of in-kind land contributions, the HCRRA’s
total contribution is $185.8 million, or 20% of the total state and local share, and 10% of the total financing
including the 50% federal match. Because state law prohibits a County Railroad Authority from contributing
more than 10% of the total capital financing of a Light Rail project, this puts HCRRA right at the limit – but
again, that is when we assume HCRRA is not contributing any in-kind land. We’ll examine this further in the
[2] LEGAL/POLITICAL CHALLENGES TO THE CURRENT FINANCE PLAN section.
The CTIB contribution, including the $11.8 million COP portion they are financing, equates to 56.9% of the
total state and local financing, or 28.4% of the total project budget. This is below the 30% project total that
CTIB would “normally” finance, using the Central Corridor as the most recent benchmark.
The state is shown as financing 3.3%, but this is based on the $30.3 million total that can be disputed. We’ll
examine this further in the next section.
[2] LEGAL/POLITICAL CHALLENGES TO THE CURRENT FINANCE PLAN
Purely legal action can probably be brought on all of these issues – the most likely to prevail (and to have
standing) would be members of the Legislature; possibly associated with one or more outside groups of various
kinds. For some categories, both Legal and Political challenges can be brought. But the first item on our list is
not a potential lawsuit – it is an actual Federal lawsuit that has advanced to having a trial date set.
[2.1] The Lakes and Parks Alliance Federal lawsuit has survived motions to dismiss
and for summary judgment, and is set for a September 2017 trial date
Federal District Judge John Tunheim has already written that the Metro Council has come “dangerously
close” to impermissible predetermination of the route before required environment review had been completed.
That finding was before the formal discovery process had even begun – it was based on publicly available
documents from the Metro Council, and published news reports. Discovery is now underway, and is scheduled
to be complete by the end of this year. The Metro Council cannot even file another motion for summary
judgment before that date without permission from the Magistrate Judge supervising the pre-trial process. On
the one hand, it is difficult to predict the outcome of a court case. On the other hand, we’re talking about a
project that is badly wounded, way over earlier budgets, the subject of statewide political controversy, and on
what some see as financial life support. From the point of view of the current financial plan, very simply, any
remedy emerging from a ruling favorable to the LPA would probably simply make it moot – the whole project
would have to, in some way, literally go back to the drawing board -- with at least one further round of
9/2/16 page 4 of 13
environmental review. We may be rolling around in Ford’s already-announced on-demand driverless vehicles –
with no steering wheel and no peddles – before whatever ends up being “Southwest Light Rail” ever gets off the
drawing board. Ford’s roll-out is scheduled for 2021. Ford’s been around for a lot longer than the Metro
Council, they’ve got a better record, and their automated driving stuff certainly has better future prospects than
Light Rail as a mode of transit. Stay tuned!
[2.2] The claimed $30.3 State Contribution is overstated by $16 million.
Recent slide presentations have indicated the Legislature has appropriated $30.3 million over three separate
sessions. This appears to be incorrect. Prior to 2013, the Legislature had made appropriations for $2 million
and $5 million. In 2013, $37 million was appropriated for “Southwest Corridor light rail transit… to be used
for environmental studies, preliminary engineering, acquisition of real property, or interests in real property, and
design.” However, in the 2015, a so-called “lights on” Transportation bill, SF 1647, was passed, to provide for
immediate needs because a full Omnibus Transportation bill couldn’t be agreed to. SF 1647 specifically
cancelled $29.7 million of the 2013 appropriation – the bill also effectively “repurposed” $27.3 million of that
money for “transit system operations.” During the House floor debate on SF 1647, Transportation Committee
Chair Tim Kelly, in response to a question about the cancellation, said it was being done to avoid “throwing
good money after bad.” The Senate passed the bill unanimously, with no discussion or debate on the
cancellation of the $27.3 for Southwest LRT, Gov. Dayton signed the bill. From this the legislative intent was,
and is, clear: the money was being taken away from the capital budget of Southwest Light Rail to avoid
“throwing good money after bad.” However, the Met Council apparently believes money appropriated by the
Legislature, possibly including the “repurposed” money appropriated in SF 1647, can somehow, through
“financial alchemy,” be transformed into additional money appropriated for the Southwest Light Rail capital
budget. The facts are clear: the Legislature appropriated (in millions) $2 + $5 + $37 - $29.7 = $14.3 million for
the Southwest Light Rail capital budget. The difference from the $30.3 claimed by the Metro Council slide
presentation is $30.3 = $14.3 = $16.0 million. There appears to be no legal basis for the Metro Council’s
apparent use of this $16 million – which has apparently already been spent – for the Southwest LRT capital
budget. Consequently, this is a basis for challenging the current Southwest LRT budget in court. A court could
reduce the total of state and local funding by as much as $16 million.
[2.3] Most or all of the $69 million of in-kind land donations should be treated as from
the HCRRA, not from Hennepin County; HCRRA is over their contribution cap
Recent slide presentations show the in-kind land donations as coming from Hennepin County. However,
most if not all of the land is actually owned by the HCRRA. Per Minnesota Statute 398A.10 Subd. 1: “A county
regional railroad authority may not contribute more than ten percent of the capital costs of a light rail transit or
9/2/16 page 5 of 13
commuter rail project.” Based on that Statute alone, it would appear that if the land is actually coming from the
HCRRA, that would put the HCRRA above the 10%. However, the State Auditor apparently believes a transfer
of the land, either from HCRRA directly to the Southwest LRT project, or from HCRRA to Hennepin County
and then to the Southwest LRT project, would not violate Statute 398A because another Statute, 471.64,
disposition of assets, including real property, is “without regard to statutory or charter provisions.” If Statute
471.64 is dispositive, then there appears to be no issue – however, if Statute 471.64 only permits the execution
of contracts for transfers of assets, and allows courts to sort out the consequences of such a contract in the
context of other provisions of Statutes, there could be a situation where the transfer of the real property itself
was permitted, but the parties would be require to make adjustments to HCRRA’s total contribution to ensure
compliance with Statute 398A. If this is the case, and if an intermediate transfer of the property is seen by the
court as a more or less classic case of money laundering (a series of transactions structured to obscure the origin
of an asset, in this case the HCRRA,) a court could hold the total HCRRA contribution to the SWLRT project,
and thus the total state and local funding, must be reduced by as much as $69 million.
[2.4] Gov. Dayton’s order to the Met Council to issue COPs raises serious
Constitutional Issues
At the news event following the public meeting Gov. Dayton convened on August 25th
, Metro Council Chair
Adam Duininck was asked if he was not breaking his word to the Legislature by using COP financing – Gov.
Dayton intervened and said he had “overruled” Duininck – thus assuming direct responsibility for using COP
financing. The operating theory seems to be this: the Gov. appoints the Metro Council with the advice and
consent of the State Senate, but beyond the moment when the appointing Senate vote occurs, Metro Council
members serve at the “pleasure” of the Governor, and therefore can be ordered around and treated like pawns.
This raises one serious issue: does such an arrangement unconstitutionally provide for an exercise of power by
the Governor that goes beyond limits imposed by the separation of powers? There is a further issue with the
Metro Council – is the scheme of statutory language that establishes it so overly broad that it is an
unconstitutional delegation of legislative powers? Regarding both issues, a legal remedy would almost
certainly reach as far as preventing or nullifying the issuing of COPs. A legal remedy may go significantly
beyond that, possibly as far as to significantly constrain or disable the Metro Council from functioning. Should
the COP financing be prevented or nullified, this would reduce the state and local funding for the proposed
Southwest Light Rail project by as much as $103.5 million, the full amount the Metro Council approved for
COP financing.
[2.5] Should any or all of the above-listed legal challenges prevail, funding from the
CTIB may then, in consequence, be illegally “supplanting” state funding
9/2/16 page 6 of 13
Minnesota Statute 297A.992 Subd. 12. provides as follows: “Grant awards to Metropolitan Council. Any
grant award under this section made to the Metropolitan Council must supplement, and must not supplant,
operating and capital assistance provided by the state.” On the one hand, obviously, the entire recent financial
exercise has been undertaken because the state has – per the slides from Gov. Dayton’s August 25th
meeting –
provided not 10% but only 1% of the total funding for the project. Because money is fungible, the gap between
the original 10% budgeted for the state and the 1% actually contributed may be a basis for claiming that the
CTIB is “supplanting” state funding. However, as the financial section demonstrated – if a court holds the in-
kind land contributions and $30.3 in “state funds” apparently spent so far are legally permitted, CTIB can argue
that because other sources beyond the HCRRA, including the state’s actual contribution, total to more than 10%
of the project, the CTIB is not “supplanting” state money, because those other sources are “supplanting” state
money. Beyond that possible argument by the CTIB, if one or more of the above challenges to the current
funding plan prevail, and the total contributed from sources other than the CTIB drops significantly, a court may
hold on that basis that some of the CTIB’s contribution can only be categorized as “supplanting” part of a
“missing” state contribution. Consequently, the CTIB’s contribution, and thus the state and local contribution,
may be significantly reduced.
[2.6] If any or all of the above legal challenges prevail, the Federal contribution must be
reduced by the same amount as the surviving state and local contributions; the Federal
Transit Administration (“FTA”) could determine the project is not financially sound
The reduction is a simple math consequence of the fact that the Federal matching amount is based on the
state and local money contributed. Beyond the possible requirement of a reduced dollar amount for the Full
Funding Agreement, the FTA could decide not to fund the project for at least two reasons. First, the project has
already had a very rocky history regarding budgets. Southwest Light Rail is actually already about a billion
dollars over the original budget, which was well under $1 billion before the route was moved from the original
Minnetonka/Eden Prairie route to plow through the “Golden Triangle” instead. Beyond that fact, the most
recent budget “blow up” in the spring of 2015 resulted in significant cuts – including a number of features that
are seen as “things we can do later” – and of course those “add ons” would be paid for with 100% state and
local money. Based on these reasons along, the FTA may determine the project is too financially problem-
plagued to allow it to proceed. But beyond these considerations, the FTA may take note at the broader political
environment that has emerged – and conclude that the project should not go forward because there is not the
state and local political will to sustain it – especially if “new” problems emerge (actually a detailed list of
several “new” problems is included in this NEWS AND ANALYSIS, items on that list won’t be “new” per se.)
[2.7] The Legislature may regulate or ban Certificates of Participation before the
9/2/16 page 7 of 13
Metro Council can issue them; a Constitutional Amendment vote may be coming
This could happen in many ways. I’ll personally be promoting this during the fall campaign: calling for a
law requiring Legislative approval by a 60% supermajority for any COP financing undertaken by any entity of
Government. That’s a simple and powerful way to prevent outfits like the Metro Council from setting up their
own rogue governments and plaguing taxpayers. And of course, this ties in with Senator Bakk’s brand spanking
new $90 million Senate Office Building – let’s not forget COP financing was used for that too.
First, and most decisively, if the Republicans win both the State House and the State Senate this fall, they
will have the option to put a Constitutional Amendment on the ballot – set for a 2018 vote – prohibiting or
regulating COP financing. It could be the same regulatory option described above. Here’s the crucial point: an
amendment goes on the ballot with a majority vote from both houses – the Governor has no legal role in the
amendment process. The Republicans wouldn’t have to bargain with the DFL – just with the voters. I think We
the People will really like this one – and I lobby for us.
Let’s dial this back a notch – suppose the Republicans hold the House but don’t win the Senate. We’re still
in a situation of divided government. However, because the COP part of the latest financing plan is not
scheduled to “kick in” until July of 2017, it is subject to a range of possible outcomes. A GOP House majority -
- especially one that was elected on this issue – will be in a very powerful position to advance this agenda:
“First: Shut down Southwest LRT!!! – no more COP financing without 60% legislative supermajorities,
and let’s get a roads-and-bridges Transportation bill done NOW – that’s something we all agree on. The
Met Council, CTIB, McLaughlin, developers, downtown bigwigs, union bosses – they’ve held Minnesota
hostage long enough. Our new $1 million Legislative Commission will study bus-based and automated
driving alternatives to the CTIB’s LRT/BRT only lane construction boondoggles. After we’ve taken an
honest look at what our options are – then we’ll decide how best to provide for transit service in the context
of an overall, 21st Century plan. Maybe we’ll be able to use some body parts from the mothballed Southwest
Light Rail plan – if not, we’ll know it’s because we’re better off just writing off that disastrous fiasco. When
you’re in a hole and you want to get out – stop digging!”
Let’s dial this back another notch. Suppose the DFL wins both houses, but it’s close (in all of these
scenarios I’m assuming Trump doesn’t get elected.) Given Trump’s probable drag on the ticket, this probably
won’t be seen as a repudiation of the GOP based on Southwest Light Rail. But far more important – the
position I’ve articulated above is the right position! There’s no reason the GOP can’t still go ahead with it –
maybe their “horse trading” position won’t be a strong – but the underlying reality remains – we’re talking
about a 21st Century system – McLaughlin’s bunch is still pushing 19
th century technology at 22
nd century
prices.
If the DFL wins both houses big, I personally think we should just keep pushing for our position – again –
it’s the right position. As for prospects of stopping the Metro Council from actually carrying out the COP plan –
9/2/16 page 8 of 13
that’s a little more problematic – the Legislature probably wouldn’t directly stop them. Worse, a strongly DFL
Legislature and Gov. Dayton might decide to go ahead with allowing or requiring a metro wide sales tax to keep
the whole CTIB “program of projects” rolling forward.
[3] KNOWN RISKS, UNCERTAINTIES AND POSSIBLE COST OVERRUNS
[3.1] The CTIB may completely fall apart
This is already happening – Dakota County has already left, and Anoka County seems likely to be right
behind them. The whole CTIB political coalition is dependent on a CTIB that is powerful enough to push
through projects that will keep Ramsey and Washington Counties happy – and induce other Counties to join or
re-join. But there is so much bad blood – so much damage has already occurred throughout the entire political
environment – it seems more likely that CTIB will be down to three Counties by early next year. The FTA will
have to factor this in to their assessment of whether it makes sense to fund more LRT projects – including
Southwest LRT – in Minnesota. They may conclude – and I think they’d be right – that allowing more LRT to
go forward would be so damaging to the overall ability of the State to agree on and provide good transit that it
would actually be harmful to provide Federal money for LRT projects in Minnesota.
[3.2] It may not be possible to build the proposed Tunnel in Kenilworth
The plan is to build a “cut and cover” tunnel with walls about 50 feet high, about a foot or two away from a
ten story condominium building that was converted from grain elevators. The soil is ancient river bed. No one
has any idea what the foundation of the condominium is – or even if there is a foundation. An earlier
construction project several hundred feet away had to be shut down for months because when they tried to
excavate the basement it was causing structural damage to the condominium. If the tunnel can’t be built – that
conclusion may be reached after the condominium has been damaged beyond repair – one of the options
advanced may be to tear down about 50 adjacent town houses. Abandoning the tunnel plan would require
another round (the third round) of Municipal Consent. Minneapolis City Council Chair Kevin Reich told me
during a tape recorded interview that if the tunnel can’t be built, we will have to revisit the co-location issue.
He said re-routing down the Greenway may yet emerge as another option. If the tunnel can’t be built – and
many think that’s the most likely outcome – it will almost certainly involve years of delay, and hundreds of
millions in increased costs – all of those costs will have to be paid with state and local dollars? BY WHO? The
Legislature – back in GOP control again? – the Minneapolis City Council? – the CTIB – it’ll probably be
defunct by then – Hennepin County? Someone would have to pay – or – the whole project shuts down. Would
we have to repay the Feds? What a mess!
9/2/16 page 9 of 13
[3.3] Possible permanent environmental damage to the Chain of Lakes
Susu Jeffrey has been taking the lead on this issue, she has decades of knowledge and experience trying to
protect and preserve water resources, including Coldwater Springs near Minnehaha Falls. The water flow
from that spring was significantly diminished resulting from the construction of Highway 55. There is
massive on-going dewatering in the I-94 corridor. Frankly, not being able to build the Kenilworth Tunnel –
as disastrous as that would be (see below) -- looks to be the preferable option when you consider risks to the
Chain of Lakes.
[3.4] An inability to deliver real transit equity
Sally Rousse and Bill Dooley have both been actively advocating on this issue. In a news conference more
than a year ago, former Congressman Martin Sabo called the “pitch” that Southwest Light Rail was an
equity train “laughable” and so dishonest it was “despicable.” The current plan for Southwest Light Rail
intersects with zero – count ‘em – zero north-south bus lines in North Minneapolis – bus commuters can
connect after transferring near the Target Center, and in some cases have to walk blocks. There has been
some talk of extending the Franklin 2 line to the Hidden Beach station. But when you consider the
enormous resources being consumed – Southwest LRT would do a poor job of serving neighborhoods in
north Minneapolis and the near south side. We need to study if there aren’t far better ways to provide transit
equity for these communities – I personally am convinced there are, and have laid out some plans with
intermediate detail that I believe conclusively demonstrate this.
[3.5] The current plan requires the purchase and operation of a second Freight right of
way in the corridor – but the Railroads and SWLRT planners don’t have an agreement
George Puzak has been taking the lead on this issue. The biggest and simplest problem is – and this is a
déjà-vu-all-over-again – we don’t have any deal with the railroads! There was supposed to be no freight rail in
the Kenilworth Corridor – no co-location – but we didn’t have an agreement with the railroads about that.
We’ve seen how well that worked – here we are again! The Railroads are also reportedly trying to work out a
broader deal – including Bottineau and possibly other routes. Other budgets to stick when they’re fresh and
ready for their “first blow-up” – oops… sorry, Bottineau already blew up by $500 million a few months ago.
So… second for Bottineau. We only know one thing for sure – when the Metro Council, CTIB and Hennepin
County voted this week – they froze the total Federal money available for Southwest LRT. Anything else after
that – from $1, to $10 – Mark Fuhrmann confirmed those examples – to my example of “a billion?” –
Fuhrmann replied “I didn’t say that” – it’s all on video – we’re on the hook – whatever it is. After the fiasco
with Kenilworth co-location it’s nothing short of amazing that we find ourselves in the same situation again –
only this time there’s no prospect for raising the budget and increasing the Federal match.
9/2/16 page 10 of 13
[3.6] Potential problems with the wetlands at the south end of the route
As with Kenilworth, we face uncertainty over construction in the wetlands on the south end of the proposed
route. At this point, I don’t have enough information to make an assessment about this.
[3.7] Potential legal claims regarding diminished property value/quality of life
There are potential legal claims by people living near the route, who may have property values negatively
impacted by the new line. Frank Lorenz, an activist from Edina, foresees these claims could easily reach into
the hundreds of millions of dollars. At this time, I don’t have enough information to make an assessment of
what this might total out to.
[3.8] The partly known cost of “finishing the job”
The current Southwest Light Rail plan is going forward after major budget cuts – it will probably cost at
least $100 million more to add back features that were stripped out after the most recent budget “blow up.” But
we have to wonder – how much more would the true cost be of “finishing” the system -- to have a system with
features that should be there from the initial launch of such a project.
[3.9] “The Roads not Taken” – Lost Opportunity Costs
Opportunity costs are real, and can often be quantified. But Mary Pattock notes that based on Metro
Council documents, no cost-benefit analysis for Southwest Light Rail was ever done. Of course, we have to
wonder how adequate their work product might have been – they don’t seem to be looking for the best possible
options. In the new age of “automated everything” that we’re now entering, trying to understand the real
possibilities of “roads not taken” (literally!) because we’re spending all our dough on a multi-billion dollar
agenda for 19th
century rail technology is absolutely essential..
<end>
9/2/16 page 11 of 13
Spreadsheet from 7/8/15 news release
Part A, $1.653 billion Percent Dollars (millions) Notes:
Cash & cash in-kind
equivalent
HCRRA 10% $165.3
CTIB 30% $495.9
State 10% $165.3
Federal 50% $826.5
Subtotal, Part A: $1,653
Part B: the $91 million budget increase
Rounding adjustment $1
Adj. to $80 M cash $10
Hennepin County
HCRRA land (in kind) $30
add'l cash $8
Fed match for HC $38 Feds match $30 million in-kind contribution
Cities
add'l cash & equiv. needed: $17
Fed match for cities $17
Subtotal, Part B: $91
Total, cash & cash equivalents: $1,744
Total, cash plus in-kind: $1,774
Cash In-kind Total
Savings, rounding adjustments $11 $11 implicit: 50% & 50% local
HCRRA $173 $30 $203
CTIB $496 $496
State $15 $15
Cities $17 $17
Met Council (see note) $150 $150
Federal $882 $882 = $826.5 + $38 + $17
Total: $1,744 $30 $1,774
EP proposes $3 million in land, counted as cash
value because it was not earlier valued at $0,
as HC's land contribution was.
Note: because no more money is expected from the State, or from other local units of government, it appears the Met
Council will have to provide $150 million to cover the "missing" portion of the state's share.
Here's just ONE of many question the Met Council WON'T be facing in a public hearing before voting today on the latest SWLRT budget:
Summary of total
expected contributions:
cash = $165.3 + $8; note, for the earlier $1.65
billion budget, the value including land is now
$195 million ($165 + $30)
This is the budget number the Met Council
was trying to cut back to.
$15 million paid so far, after $30 million was cancelled in
May '15; indications are no more is coming from the state
This is (in millions) the recent $341
increase, less $250 in cuts, the resulting
budget increase is $91
This is rounded down from $91 million, and adjusted by $10
million to $80 million, per the 7/1 COTW presentation
Is the revised Southwest LRT project cost $1.744
billion, $1.774 billion, or someing else?
Cash value of rounding adjustment
Cash value of projected savings, per 7/1 COTW slide
presentation
The land value is treated as "in kind" because the Met
Council said the earlier plan was to value it at $0. Nothing
new is actually going into the project, only the valuation
amount has changed.
So… what should we report as the project
cost? Should we value the HC land at $0
for the Local contribution, but $30 million
when seeking Federal dollars?
9/2/16 page 12 of 13
Per slides from Gov. Dayton's 8-25-16 meeting
Slide 6: Funding commitments for 84% ($784.5 M) of the local share
Federal: 50%
State/local: 50%, made up of:
Unmet need: 8%
In-kind land: 4%
County & Cities: 1%
HCRRA: 9%
CTIB: 27%
State: 1%
Total except "unmet need": 42% based on state and local as 50% base, or 84% based on state local as 100% base
Slide 9: Funding Gap (millions of $'s):
135.0 Remaining state share
19.0 Cost of delay (end of session to 10/1/16)
(9.5) Federal share of delay at 50%)
144.5 Unmet need
Slide 10: Federal funding is $928.5 million
Reconciliations:
16% = $144.5 / ($784.5 + $144.5), rounded
929.0$ = $784.5 (slide 6)+ $144.5 (slide 9), matches Federal funding (slide 10) within $.5 million
mystery
Part II, from my July 2015 spreadsheet -- here's the starting point as of about 7/1/15, for state/local sources:
CMC 7/16 $165.3 HCRRA
CMC 7/16 $495.9 CTIB
CMC 7/16 $30.3 State (benefit of doubt to Dayton et al, more likely $16 million)
Other, as of 7/1/15 Met Council COTW meeting, subtotal is $18 million
$8.0 Add'l cash from cities, per 7/1/15 Met Council COTW meeting
$10.0 Adjustment, per 2015 Met Council COTW 7/1/15 slide presentation
$709.5 Total State and Local provided so far
$928.5 Total State and Local needed
$219.0 Gap #1, total State and Local needed less provided
Certificates of Participation
$91.8 Council Finances
$11.8 CTIB Finances
$20.5 HCRRA direct
$20.5 CTIB direct
$144.5 Total
Slide 8: Current funding for Southwest LRT (note: state/local total is 50% -- all
percents double as a percentage of state/local contribution)
The HCRRA in-kind land contribution is apparently first transferred to Hennepin County,
then donated to the SWLRT project -- this appears to be an attempt to avoid having the
HCRRA contribute more than 10% of the total project funding.
Option 1:, from slide 11 at Gov. Dayton's 8/25/16 meeting, his proposal for add'l
money, totals $144.5
"CMC 7/16" indicates data was verified or obtained with materials from the July, 2016 Corridor Management
Committee meeting
9/2/16 page 13 of 13
$69.0 Valuation of Hennepin County land at fair market value
$5.5 Gap #3, Gap #2 reduced by valuing in-kind land at $69 million FMV
Total contributed from each source, counting in-kind land as HCRRA contribution
$254.8 HCRRA Includes FMV of in-kind land
$528.2 CTIB Includes $11.8 M CTIB portion of COP
$30.3 State
$91.8 Metro Council
$0.0 Hennepin County Excludes FMV of in-kind land
CMC 7/16 $18.0 Other, as of 7/1/15 Met Council COTW meeting
CMC 7/16,
18.0 + 5.5
combined
is $23.5
$5.5 Other/unidentified
$928.5 Total contributed
$0.0 Variance, total contributed less Federal contribution of $928.5
20.0% HCRRA Excludes FMV of in-kind land
56.9% CTIB Includes CTIB portion of COP
3.3% State
9.9% Metro Council
7.4% Hennepin County Includes FMV of in-kind land
1.9% Other, as of 7/1/15 Met Council COTW meeting
0.6% Other/unidentified "Plug" -- added to set variance at zero
100.0% Total contributed
19.8%
Adjusted percentages based on Federal match of $928.5 million, then increased
by 100% to show as percent of total state and local only, but treating in-kind land
as from Hennepin County, and not from HCRRA
Contributions from all but CTIB, State and HCRRR, this is very close to the original
target of 20% from the State -- the argument is then that CTIB money is not
"supplanting" state money.
Assumes state contribution is $30.3 million, that's
arguably about $16 million too high
"Plug" = Gap #3, sets variance at zero. Note, the
CMC 7/16 meeting shows "Henn. Co and Cities at
$23.5 M, this matches with the $18 + $5.5 = $23.5 M
for this and the previous line items
Per 8/25/16 meeting benefit of doubt, more likely
$16 million